Two recent decisions, however, have departed from this view. In Central Florida Production Credit Ass'n v. Spring Garden Foliage, Inc. (In re Spring Garden Foliage, Inc.), 15 B.R. 140 (Bkrtcy.M.D.Fla. 1981), the court noted that the proposition that all outstanding encumbrances must be considered in determining lack of equity "has no support by logic or by the legislative history of § 362." Id. at 143.
While Judge King's opinions support the Fund, there are two published opinions which appear to support the debtor's view. In Matter of Spring Garden Foliage, Inc., 15 B.R. 140, 143 (Bkrtcy.M.Fla. 1981), Judge Paskay emphatically takes a view in support of the debtor's position. See also In re Wolford Enterprises, Inc., supra, 11 B.R. at 571.
While Judge King's opinions support the Fund, there are two published opinions which appear to support the debtor's view. In Matter of Spring Garden Foliage, Inc., 15 B.R. 140, 143 (Bkrtcy.M.Fla.1981), Judge Paskay emphatically takes a view in support of the debtor's position. See also In re Wolford Enterprises, Inc., supra, 11 B.R. at 571.
We recognize that some bankruptcy courts have rejected the standard definition of equity for purposes of section 362(d)(2) analysis when junior lienholders protest the lifting of the automatic stay to permit foreclosure. See United Finance Co. v. Cote (In re Cote), 27 B.R. 510, 513 (Bankr.D.Or. 1983); Asquino v. Palmer River Realty, Inc. (In re Palmer River Realty, Inc.), 26 B.R. 138, 140 (Bankr.D.R.I. 1983); Central Fla. Prod. Credit Assoc. v. Spring Garden Foliage, Inc. (In re Spring Garden Foliage, Inc.), 15 B.R. 140, 143 (Bankr.M.D.Fla. 1981). Nantucket Investors urges us to adopt that rule, but we decline to do so.
In those decisions, the courts have held that "it would be incongruous for a senior lienholders who is oversecured to assume the position of a junior lienholders and argue lack of equity in order to obtain relief from the automatic stay when such relief is not desired by the junior lienholders and when such relief would not be in the best interest of the junior lienholders."See Collier on Bankruptcy, 15th ed., § 362.07[4][a] (2008); United Fin. Co. v. Cote (In re Cote), 27 B.R. 510, 513 (Bankr.D.Or. 1983); Cent. Fla. Prod. Credit Ass'n v. Spring Garden Foliage, Inc. (In re Spring Garden Foliage, Inc.), 15 B.R. 140 (Bankr.M.D.Fla. 1981). At the oral argument, the Trustee contended that under the facts of this case, should the taxing authorities elect not to outbid the senior lien held by the Hannigs at a trustee sale under the deed of trust, their claims would lose their secured status and become priority unsecured claims that would be paid prior to any of the other non-priority unsecured claims.
In those decisions, the courts have held that "it would be incongruous for a senior lienholders who is oversecured to assume the position of a junior lienholders and argue lack of equity in order to obtain relief from the automatic stay when such relief is not desired by the junior lienholders and when such relief would not be in the best interest of the junior lienholders.See Collier on Bankruptcy, 15th ed., § 362.07[4][a] (2008); Cote v. United Fin. Co. (In re Cote), 27 B.R. 510, 513 (Bankr. D. Or. 1983); Cent. Fla. Prod. Credit Ass'n v. Spring Garden Foliage, Inc. (In re Spring Garden Foliage, Inc.), 15 B.R. 140 (Bankr. M.D. Fla. 1981). At the oral argument, the Trustee contended that under the facts of this case, should the taxing authorities elect not to outbid the senior lien held by the Hannigs at a trustee sale under the deed of trust, their claims would lose their secured status and become priority unsecured claims that would be paid prior to any of the other non-priority unsecured claims.
In those decisions, the courts have held that "it would be incongruous for a senior lienholders who is oversecured to assume the position of a junior lienholders and argue lack of equity in order to obtain relief from the automatic stay when such relief is not desired by the junior lienholders and when such relief would not be in the best interest of the junior lienholders."See Collier on Bankruptcy, 15th ed., § 362.07[4][a] (2008); United Fin. Co. v. Cote (In re Cote), 27 B.R. 510, 513 (Bankr.D.Or. 1983); Cent. Fla. Prod. Credit Ass'n v. Spring Garden Foliage, Inc. (In re Spring Garden Foliage, Inc.), 15 B.R. 140 (Bankr.M.D.Fla. 1981). At the oral argument, the Trustee contended that under the facts of this case, should the taxing authorities elect not to outbid the senior lien held by the Hannigs at a trustee sale under the deed of trust, their claims would lose their secured status and become priority unsecured claims that would be paid prior to any of the other non-priority unsecured claims.
See also M. Bienenstock, Bankruptcy Reorganization, 134-135 n. 92-93 (1987). But see Central Fla. Prod. Credit Ass'n v. Spring Garden Foilage, Inc. (In re Spring Garden Foliage, Inc.), 15 B.R. 140, 143 (Bankr.M.D.Fla. 1981); Wolford v. Wolford Enters., Inc. (In re Wolford Enters., Inc.), 11 B.R. 571, 574 (Bankr.S.D.Va. 1981).
Here, there is no value in excess of the mortgage debt and tax liens, in the aggregate. Contra, Matter of Spring Garden Foliage, Inc., 15 B.R. 140 (B.C.M.D.Fl. 1981). Although the debtor does not have an "equity" in the property, it cannot be said that the "property is not necessary to an effective reorganization."
For this reason alone, this court could find the Oregon Bank cannot receive relief under 11 U.S.C. § 362(d)(2). It should be noted that in determining the amount of equity a debtor has in property within the meaning of § 362(d)(2), this court does not include the amounts owed to the lienors junior to the movant's lien. In re Cote, 27 B.R. 510 (Bankr.D.Or. 1983), In Re Spring Garden Foliage, Inc., 15 B.R. 140, 143 (Bankr.M.D.Fla. 1981). In reviewing the total of the Oregon Bank's stipulated debt against the property it is clear, regardless of which of the two appraisal values presented by the parties is accepted as the fair market value of the property, the figures support the Oregon Bank's acknowledgment that the debtor-in-possession has some equity in the property.